Required equity and borrowed funds
A margin purchase splits the cost of a position into two parts: money you put up and money you borrow from your broker. The calculator multiplies the purchase price by the number of shares to get the position value, then applies the initial equity percentage you enter. In the default example, 100 shares at 50.00 make a position worth 5,000.00. With 50% of your own money, you contribute 2,500.00 and borrow 2,500.00. Leverage, which is the position value divided by your own money, is 2.00. The loan does not change when the share price moves, so every dollar of loss lands on your equity first. Enter the initial percentage your broker actually requires, because some brokers ask for more than the regulatory minimum and not every security can be bought on margin.
Initial versus maintenance margin
Two different percentages govern a margin account, and they apply at different moments. Initial margin applies when you buy. The Federal Reserve's Regulation T lets you borrow up to half of the purchase price of eligible securities, according to an SEC investor publication on margin that was last reviewed in 2009. Maintenance margin applies afterwards. It is the minimum equity you must keep as a share of the position's current market value.
The same SEC publication gives 25% as the minimum maintenance requirement and notes that many firms ask for more, typically 30% to 40%. A FINRA article from April 2026 describes the 25% minimum for long margin-eligible stock and says firms may impose higher requirements. This is why the maintenance field is yours to set: use your broker's number, not a default. If you enter an initial equity below the maintenance requirement, for example 20% against 30%, the calculator tells you the position starts below the requirement, so there is no cushion at all. Rules for frequent day trading are separate and are not modelled here.
Formulas and boundary chart
Write P for the share price, Q for the number of shares, L for the amount borrowed and m for the maintenance percentage. The position value is V = P × Q. Your equity is E = V − L. The maintenance requirement is R = m × V, and the cash deficiency is the larger of R − E and zero. The margin call price is where equity just equals the requirement. Setting P × Q − L = m × P × Q and solving gives P = L ÷ (Q × (1 − m)). With L = 2,500.00, Q = 100 and m = 25%, that is 2,500.00 ÷ (100 × 0.75) = 33.33, which is 33.3% below the purchase price.
The chart plots equity as a percentage of the position value, which is 1 − L ÷ (P × Q), against the share price from 25% to 150% of what you paid. The line falls as the price falls and crosses the dashed maintenance line at the call price. Below that point the account is short of the requirement. If the price reaches zero, equity equals minus the loan and the percentage is not defined, so the calculator says so instead of showing a meaningless figure. When nothing is borrowed there is no debt-driven threshold, and equity stays at 100%.
Worked 50 × 100 example
Take the default case: 100 shares bought at 50.00, 50% initial equity and a 25% maintenance requirement. You pay 2,500.00, borrow 2,500.00, and the call price is 33.33. If the price falls to 40.00, the position is worth 4,000.00, your equity is 1,500.00 and the requirement is 1,000.00, so you are still above it. At 30.00 the position is worth 3,000.00, equity is 500.00, the requirement is 750.00 and the shortfall is 250.00. At 25.00 the position is worth 2,500.00 and your equity is 0.00: the whole of your own money is gone.
| Price | Position value | Equity | Required | Shortfall |
|---|---|---|---|---|
| 50.00 | 5,000.00 | 2,500.00 | 1,250.00 | 0.00 |
| 40.00 | 4,000.00 | 1,500.00 | 1,000.00 | 0.00 |
| 30.00 | 3,000.00 | 500.00 | 750.00 | 250.00 |
| 25.00 | 2,500.00 | 0.00 | 625.00 | 625.00 |
Below the call price the shortfall grows by 75.00 for every one-dollar fall in the share price, which is the number of shares times one minus the maintenance percentage. That is why the gap in the table widens by the same amount at each step.
Price scenarios and broker limits
The scenario price lets you test any price you worry about, from zero upward, and the result shows your equity, the requirement and the shortfall at that price. A second case shows why your broker's number matters. The SEC publication works through a position bought for 16,000.00 with 8,000.00 borrowed. After a fall to 12,000.00 the equity is 4,000.00. A 25% requirement needs 3,000.00, so there is no shortfall. A 40% requirement needs 4,800.00, which leaves a shortfall of 800.00 and can trigger a margin call.
This calculator is not a prediction of what your broker will do. The SEC warns that a firm may sell your securities without asking you first, and that you can lose more than you put in. It leaves out borrowing interest, fees, taxes, special requirements on concentrated or volatile stocks and the minimum equity needed to use leverage at all. Read your margin agreement and the broker's published rules. For sizing a trade from the amount you are willing to lose, use the position size calculator. To see how win rate and bet size affect the chance of ruin, try the risk of ruin calculator. If you came here for business profit margin and markup, the margin and markup calculator covers that. Trading with borrowed money is risky: read the risk disclaimer first.
Stock margin questions
What is the difference between initial and maintenance margin?
Initial margin is the share of the purchase you pay with your own money when you buy. Maintenance margin is the minimum equity you must keep afterwards, as a share of the current position value. Both percentages are set by regulation and by your broker, so enter your broker's figures.
How is the margin call price calculated?
Divide the borrowed amount by the number of shares times one minus the maintenance percentage. For 2,500.00 borrowed on 100 shares at 25%, that is 33.33 per share. Below that price your equity is under the requirement.
Can I lose more than I deposit?
Yes. The loan stays the same when the price falls, so a large drop can push equity below zero. At a price of zero the equity in this model is minus 2,500.00, which is the loan itself. The SEC warns that you can lose more than you invested.
Is stock margin the same as profit margin?
No. Stock margin is borrowed money and collateral in a brokerage account. Profit margin is profit as a share of revenue in a business. For that task use the margin and markup calculator linked above.
Does this predict when my broker will sell my shares?
No. Brokers apply their own house requirements, may change them and may act without notice. The calculator shows the arithmetic for the percentages you enter, nothing more.